A Once-stable Price Now Responding to Demand Changes Brings Price Gouging Charge

Michael Giberson

A letter to the editor of the South Florida Sun-Sentinel:

The Interstate 95 express lane authority is price gouging! The express lane toll increases dramatically relative to traffic congestion, roadway emergencies and increased demand by motorists. A merchant who increases his prices during a weather emergency and times of increased demand can in some cases be prosecuted for price gouging (Florida Statute 501.160). It is despicable when done by unethical merchants, and even more so when it is done by a government entity. This practice is nothing more than an immoral money grab, and the I-95 authority ought to be held accountable.

Pricing according to consumer demand “nothing more than an immoral money grab”? The response is illustrative of the fact that historical pricing practices acquire a sort of normative value to consumers and deviation from normal can seem unnatural and even, in the view of some consumers, as immoral. (But only when we’re talking price increases. “Unnatural” price decreases don’t rattle a consumer’s moral consciousness much at all. For discussion, see the book linked above.)

For another perspective, here is a blog post by a carpentry contractor ruminating on pricing practices for new and established customers.

2 thoughts on “A Once-stable Price Now Responding to Demand Changes Brings Price Gouging Charge

  1. Raising prices in times of high demand is either “price gouging” or it is not, regardless of the identity of the perpetrator.

    I have no issue with what the turnpike authority is doing, but I also have no issue with what inadequate statutes, such as the FL statute, treat as price gouging.

    I suspect the intent of the letter to the editor was to point out the hypocrisy involved. Unfortunately, it may have been too subtle for FL politicians.

  2. Ed, I suspected the same thing, but it was too subtle for me to decide if the writer was sincere or not. If too subtle to me, then you’re probably right that it was too subtle for the target audience.

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